Editorial: Rio+20 and looking back at 20 years of corporate social responsibility

How corporate philanthropy turned into CSR strategy and leaders emerged from unlikely places

From June 20 to 22, government representatives from around the world will meet in Rio de Janeiro, Brazil for Rio+20, the United Nations Conference on Sustainable Development. The parties have a large task before them, building on the groundwork laid out at the 1992 Earth Summit where representative nations set out guidelines for a broadly defined vision of sustainability which included environmental protection and social and economic growth.

Rio+20 will take a more focused approach with the transition to a green economy leading the agenda. Discussions will focus on what is needed to stimulate a co-ordinated effort from government, the private sector, civil society and consumers to transition to a green economy. The conference provides a key opportunity to reflect on the progress made by all parties since the 1992 summit as well as a chance to envision next steps in reducing environmental and social impacts.

Brazilian service men raise flags of the United Nations (UN), Brazil and the UN Conference on Sustainable Development (Rio+20) during a flag hoisting ceremony in Rio de Janeiro June 5, 2012. The Rio+20 summit will be held from June 20 to 22 in Rio de Janeiro. (Marcos Michael/Reuters)

During the past 20 years, Sustainalytics (formerly Jantzi Research) has been analyzing the environmental, social and governance (ESG) performance of publicly traded companies. In this time, a significant trend toward enhanced sustainability performance and disclosure has been noted. Initially corporate social responsibility strategies were narrowly focused on corporate philanthropy and vague environmental commitments; however, they have since evolved to strategically address key areas of social and environmental impact. Leaders have emerged from unlikely places across the private sector and collaboration has proven essential in developing innovative solutions to meet sustainability objectives.

Companies have realized some issues are too big to be addressed alone and some are even working with their competitors to address shared challenges such as supply chain management. Through industry coalitions companies can share innovative tools and programs to strengthen sustainability performance across the industry and create positive change on a larger scale. Many companies on the 2012 list of Top 50 Most Socially Responsible Corporations, including adidas, Gap Inc., H&M, Inditex and Nike, are working together through the Sustainable Apparel Coalition to develop tools to reduce the environmental and social impacts of footwear and apparel products.

Nike has emerged as a leader in the textiles industry, building upon its own sustainability strategies and innovations and sharing its experiences with other companies. For example, Nike developed the H2O*Insight Water Tool which tracks the water quality, quantity and efficiency of its supply chain partners and made the tool available to its vendors and to other brands to support the efficient tracking of water use in the textiles industry. Nike proved that in the pursuit of a sustainable future, collaboration not only broadens impact but can also bring about competitive advantages. By disclosing information traditionally seen as proprietary, including its list of major suppliers, Nike has strengthened its reputation and brand image among key stakeholders.

Similarly, through participation in the Mining Association of Canada’s (MAC) Towards Sustainable Mining (TSM) initiative, industry members are collaboratively addressing some of the inherent environmental and social impacts associated with mining operations. TSM is a robust tool that allows companies to report environmental and social data and includes external verification of performance. TSM also includes a protocol for tailings management, the disposal of which is a highly contentious issue for the sector. The actions of some companies, that continue to discharge tailings into rivers damaging river ecosystems and the communities that rely on them, reflect negatively on the industry as a whole. Both IAMGOLD and Inmet have positioned themselves as leaders by reporting consistently according to TSM guidelines.

Collaboration can also stimulate innovation. Healthymagination, General Electric’s business strategy for achieving sustainable health, includes a strategy to invest in promising start-ups that focus on increasing access to healthcare and improving it. The company’s Healthymagination challenge has committed to investing up to USD $100 million in ideas that advance breast cancer detection and care. In doing so, GE reaches out to market players with less capital power, leveraging its financial strength and investor network to bring innovative ideas to fruition and increase access for consumers. Other companies are lending their technical expertise to non-profit organizations to bring about social and environmental change. IBM, for example, partnered with the Nature Conservancy to build web-based tools for river basin management that include computer simulations to visualize how land- and water-use affects ecosystems and biodiversity. IBM models the extent to which the private and public sector can effectively work together to bring about change.

In the past two decades, corporations, such as those featured on the 2012 list of Top 50 Most Socially Responsible Corporations, have set aside traditional views of competitiveness and have collaborated to overcome social and environmental issues. Although much progress has been made, the private sector, governments, investors, civil society and consumers will continue to explore new collaborative avenues to advance the transition to a green economy. The next 20 years are sure to witness further progress through strategic partnerships and leading-edge innovations to improve human well-being, protect the environment and promote economic development.

For more on corporate social responsibility, visit the Sustainalytics website.

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